Goldman Sachs Investment Chief: 50% Chance of Fed Rate Hike in July, Wealth Effect from Rising Stock

On June 24, Lindsay Rosner, the head of multi-sector investments at Goldman Sachs Asset and Wealth Management, warned that the "likelihood of the Federal Reserve raising interest rates in July is quite high," with a probability of 50%. In a recent interview, she pointed out that the upcoming inflation data, particularly the personal consumption expenditures report, is a key factor that could prompt the Fed to take action. Rosner further noted that the wealth effect from rising stock prices may be reflected in the inflation data, potentially serving as a justification for a rate hike. She highlighted that items in the personal consumption expenditures basket related to artificial intelligence spending, such as software and accessories, are expected to rise in the next report, stating, "The Fed will have to respond to this." As a result, Goldman Sachs has adjusted its internal outlook, pushing back the expected timeline for interest rate cuts to the end of 2027.